On Monday President Trump’s administration declared in a report that US middle-class citizens will see a rise higher than $4000 should President Trump’s corporate tax cuts receive the seal of approval. This was done to counteract the criticisms of the Democrats who are of the opinion that these tax proposals will benefit rich Americans tremendously.
The top Republicans in the US Congress and the White House issued an outline for tax reform which had no detailed information. However, it is the intention that this framework should serve as a guideline for the congressional committees who are formulating tax legislation.
President Donald Trump declared that he is in favour that the corporate income tax-rate of the United States should be reduced from the existing 35% rate to 20%.
According to the analysis of the Economic Advisers Council of the White House, reduced corporate taxes would encourage companies investing in new equipment which will demand more skilled employees. Eventually the companies would pay these higher skilled workers, higher wages.
The CEA’s chairman, Kevin Hassett said to journalists during a conference call that above-mentioned benefits can take a period of about 5 years to set in totally.
Hassett added that reduced corporate rates may stimulate companies to rather build factories within the US, instead of overseas.
Middle-class employees may see their incomes rising with $4,000 in accordance with above-mentioned analysis. However, as stated by Hassett, such a full increase would only be fully viable in a period of 5 years.
However, according to the non-partisan research institution. known as Tax Policy Center who is fiscal policy analysts, stated that the all-inclusive benefits of reduced corporate taxes lean strongly in the favour of those in the higher income range.
According to the above-mentioned Tax Policy Center, the taxpayers in the middle-income range will receive lower than 10% of the advantage of such a cut in corporate taxes, in comparison with the top 20% who will receive approximately 70%. With the top 1% receiving approximately a third of the advantages, whilst the top 0.1% getting in the range of one-fifth.
The Democratic legislators condemned the tax relief plan of the Trump Administration for small businesses and corporations as a special offer to the rich.
On Saturday, the weekly policy address of the Democrats was delivered by Senator Bernie Sanders, who was a presidential candidate in the 2016 election who stated that the tax and budget proposals of the Trump Administration were: “the most destructive and unfair” in the country’s modern history.
Sanders added: “Donald Trump and Republicans in Congress claim that their tax plan would benefit the middle class. Nothing could be further from the truth.”